Judge analytics – PCIT vs. NRA Iron and steel

While most people associate the practice of law
with the highlight grabbing action in courts, a fundamental part of any
successful case is the research done in the background. Research is usually
considered a tedious process, with most people having to spend hours to arrive
at an operative case or to uncover an insight that would bolster their argument
in court.

However, traditional tools of research tend to
be more focused towards presenting a barrage of case laws on any and every
topic allied to a research point. This is akin to taking a club to a problem
that requires a scalpel.

PCIT vs. NRA Iron and Steel

A case in point would be the recent Supreme Court decision in PCIT vs. NRA Iron and Steel. At first blush, it seems like a straightforward case dealing with issue of unexplained cash credits in the form of share application money, the case turned on a few obscure points that a traditional research source would not be able to highlight to a concerned party.

However, what makes this case unique is the fact that the SC seemingly bucked the judicial trend on cases regarding share application money to hold that the assessee’s burden would not be discharged merely by identifying the creditors and showing the use of proper banking channels for the transaction.

This is where the point of a focused and
precise legal research comes in. While precedents may be the guiding factor to
a decision, one must not forget that at the end of the day it is judges who are
making the final decision.

Riverus income tax research tool enables you to view comprehensive judge profiles, giving you access to the entire catena of cases decided by the judge in their career. It also enables you to specifically look for cases on a particular subject or section decided by the relevant judge. How can this be helpful for a litigator?

As mentioned before, while precedents are
extremely persuasive in any argument, sometimes judges tend to follow a
viewpoint that they have decided in an earlier case on a similar question of
law. This is one of the reasons why sometimes different high courts hold
differently on the same question of law (For reference, the judicial schism
between Delhi and Karnataka HCs on the question of royalty on software.
However, this is a discussion for another day.)

In the case of NRA Iron and Steel, a quick look
at the judge profiles of the presiding judges UU Lalit and Indu Malhotra would
reveal that neither of them had ever decided a case related to unexplained cash
credits or on the question of bogus share application money. This presented a
golden opportunity to either party in the case to seize control of the
narrative of argumentation in court and tilt the balance in their favour.

This is where the curious decision of NRA to
not send in representation to the SC comes in. The HC had dismissed the
revenue’s petition citing the lack of a substantial question of law. This fact,
coupled with the general judicial trend which favoured the assessee in such
cases, may have prompted NRA to believe that they had a reasonably fair chance
of success before the SC. However, a look at the judges’ profiles would have
told them that they were missing a substantial trick in this case.

However, there is a possibility that NRA may
have been in internal difficulties at the relevant time, meaning they could not
devote a ton of attention to the litigation. In such a case, a party must do a
cost benefit analysis of their actions.

A quick research on Riverus income tax research tool would have revealed to the assessee that that the judicial stars were aligned most unfavourably for them. Not only were the judges unfamiliar with the subject matter, the track record for unrepresented parties in tax cases before the SC has been abysmal in the recent past. The last time an unrepresented party won at the SC in a tax case was in 1971. Since then all the cases have been decided against the absent party.

Therefore, the question of what constitutes
great legal research does not entail determining how many pages of case laws
you can stack up before the court. More often than not, it is about those one
or two small little things that come out once you delve deep into the data
using a tool meant to enhance and energize your research while also making it
more efficient.

So, what do you prefer? A club or a scalpel?

All the insights in the report are based on data available in the public domain and are true and correct to the best of our knowledge. The report is meant for informative purposes only and must not be construed as legal advice. Riverus bears no liability in case any individual or an organisation acts on the data and inferences given in the report.